ECON202 Chapter Notes - Chapter 2: Gdp Deflator
16 Oct 2011
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Total expenditure on domestically-produced final goods and services. Total income earned by domestically-located factors of production. Expenditure equals income because every dollar spent by a buyer becomes income to the seller. The value of the final goods already includes the value of the intermediate goods, so including intermediate and final goods in gdp would be double-counting. Some rules for calculating gdp: the importance of inventories. Count the value of final goods and services only in the gdp calculation. The value of all goods and services bought by households. Durable goods - last a long time e. g. , cars, home appliances. Nondurable goods - last a short time e. g. , food, clothing. Services - work done for consumers e. g. , dry cleaning, air travel. Spending on goods bought for future use (i. e. , capital goods) The purchase of newly produced goods/services to add to the capital stock. Business fixed investment: spending on plant and equipment.
